10 states where taxpayers get the best bang for their buck

Every April, Americans bristle over the amount of state and local taxes they end up paying — with some (or many) believing they don’t see it reflected in garbage collection or police services. But how much bang for their buck are taxpayers really getting? Higher taxes don’t necessarily equal better services. In Wyoming, for example, residents pay the least state and local taxes of any U.S. state, but also get the best return on their investment, according to a new report by financial website WalletHub. Analyzing the quality of public services like education, infrastructure and health, and taking into account violent crime and unemployment, WalletHub crunched the data. Here are the best:

Massachusetts is the only New England state to make the Top 10 list, but given that it’s the third most densely populated state in the country, that was no small feat. However, this northeastern state is rated among the five states with the worst roads and bridges (along with Connecticut, Hawaii, Rhode Island and D.C.) and only scores 42nd place for infrastructure. It’s No. 6 in terms of safety and No. 12 for both public education and health services.

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9. Utah

Average annual state and local taxes: $6,098

After Nebraska, Utah scored the best on the list of most economically healthy states in terms of the taxes paid by residents. It also ranked No. 7 for safety and No. 5 for health. In fact, the state has the fifth best hospital system after Iowa, Minnesota, Nebraska and Kansas, according to the WalletHub study. It’s also one of the most religiously homogenous states in the union as over 60% of residents are members of the Church of Jesus Christ of Latter-Day Saints.

Bloomberg

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8. Texas

Average annual state and local taxes: $5,193

A state with no state income tax, Texas ties with Florida for seventh place for public services that give the best return on investment for taxpayers. However, although it fares better than most U.S. states when it comes to its economic ranking (No. 10), it’s one of the more polluted states in the U.S. in terms of air and water quality (No. 44). Texas residents pay property taxes at the county, district and school level.

Bloomberg

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7. Florida

Average annual state and local taxes: $3,648

Besides the beaches, sunshine and Walt Disney World theme park, Florida has no state income tax. The downside: It also ranks among the top five states (along with Michigan, California, Arizona and Nevada) in terms of house price volatility, having experienced a massive housing boom before the Great Recession. (It’s the eighth most populous state in the U.S.) And It only ranks No. 40 for both safety and economic measures, according to WalletHub’s analysis.

Bloomberg

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6. Colorado

Average annual state and local taxes: $5,674

Colorado rates No. 6 in the list of states that give taxpayers bang-for-their-buck in public services, but it only rates No. 22 for public education and No. 32 for safety, which includes the rate of violent crime, vehicle fatalities and youth incarceration. Still, the state is the fifth least polluted state in the union and ranks No. 9 in economic quality of life, which includes unemployment, annual income versus cost of living and home price volatility.

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5. North Dakota

Average annual state and local taxes: $5,588

Given the oil boom here, it’s hardly surprising that North Dakota scores No. 4 for both WalletHub’s economic and infrastructure ranking, No. 3 in terms of least polluted states and ranks in the top 5 states for water quality. On the downside, it’s only No. 44 for public education and No. 27 for public health-care services. One consolation: With two men for every woman, Williston, N.D., the heart of the oil boom, may also be a good place for some to find love.

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4. Washington

Average annual state and local taxes: $3,823

If you can overlook the heavy rainfall, there’s another reason to enjoy the hospitality of the Pacific Northwest: It ranks No. 4 for return on investment for taxpayers and No. 8 in terms of government services in health care. However, it only ranks 44th out of all the U.S. states for public education and universities. Washington state is also one of seven states that doesn’t levy a personal income tax (nor does it collect franchise or corporate income tax).

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3. South Dakota

Average annual state and local taxes: $3766

The chiseled heads at Mount Rushmore may be the most famous tourist attraction, but South Dakota has another reason to attract people: It’s No. 3 on the list in terms of value-for-money for taxpayers. It also ranks No. 3 for best water quality in the U.S. (after West Virginia and South Carolina and before North Dakota and Hawaii). No surprise to anyone who’s been to Badlands National Park or Big Stone Lake, it’s the second-least polluted state in the nation.

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2. Alaska

Average annual state and local taxes: $2,791

The home of one-time Republican vice-presidential hopeful Sarah Palin, Alaska has the highest violent crime rate (along with New Mexico, Nevada, Tennessee and the District of Columbia), but has the least pollution of all U.S. states and the lowest home-price volatility (ahead of Iowa, Kentucky, Indiana and Kansas). But the state known as “The Last Frontier” also has the second-best return on investment when it comes to the amount of taxes paid by its citizens.

Bloomberg

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1. Wyoming

Average annual state and local taxes: $2,365

This mountainous state in the western U.S. has the lowest state and local taxes, and also gives the best return on investment. It probably also helps that it’s the least populous state in the country (and second-least densely populated after Alaska) with fewer than six people per square mile. Wyoming has the fifth lowest-crime rate and ranks No. 1 for infrastructure, but still doesn’t rank in the top five states for best schools, water quality or home price volatility.

Bloomberg

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1. Wyoming

Average annual state and local taxes: $2,365

This mountainous state in the western U.S. has the lowest state and local taxes, and also gives the best return on investment. It probably also helps that it’s the least populous state in the country (and second-least densely populated after Alaska) with fewer than six people per square mile. Wyoming has the fifth lowest-crime rate and ranks No. 1 for infrastructure, but still doesn’t rank in the top five states for best schools, water quality or home price volatility.

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